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Transcript:
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Hello, this is Tony Lou and I am the founder of Focus Law. We help business owners break free from dishonors partners and bad deals. If you ever made a tough call uh as a business owner and the decision helped the company and just happen to benefit you as well personally, you may hear someone whispering in the background conflict of interest, but is really here is the truth. Personal benefit doesn’t automatically make a decision improper, not under the law and not under the business judgment rule. Let’s unpack
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with a real example. In a case called Tudi versus Specialty Surgical Center, the board removed a disruptive partner and yes, the remaining members benefited their ownership shares and become more valuable. The court did not see that as a selfdeing. Why? Because the board acted to protect the business not to enrich themsself. The business judgment rule protects decision made in good faith with reasonable care and in the best interest of the company. The law understands the business decision can have side benefit. What matter is why
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the decision was made. The conflict of interest exception only applies when personal gain overtakes company’s purpose. If the company benefits and that is your true aim, the law is on your side. Here’s the bottom line. If you are making decisions to protect and grow your business, you are documenting the reasoning. You are likely to protect it even if somebody else claim otherwise. It’s not about avoiding all the benefits. It’s about staying focused on the enterprise. If you are a founder,
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a partner, or board member who is being second guessed or even accused for doing what you believe was right for your business, don’t wait. Call us today at Focus Law 714415207. Let’s review your decision together. You may be more protected than you realize and we will help you to ensure your leadership and your company stay protected. Call me today.
This transcript was AI-generated.
